NEW YORK—Sales of new trucks and cars experienced a steady rise from 2009 to 2016, the longest period of growth in years, the New York Times reports. But sales to individuals are plummeting, even with more discounts and incentives.
“We are turning down cars and are being more picky on the cars we stock,” said Brian Benstock, general manager of Paragon Honda in New York City. “We just can’t take more. We’re full.”
With newer vehicles built to last longer and the average cost for a car hitting $35,000, people either don’t have a need for a new car or don’t want to spend that much on a new car. “It’s a double whammy,” said Mike Jackson, chairman of AutoNation. “Customers are having monthly payment shock.”
The auto sale deceleration might impact the U.S. economy, with the industry around 3% of the gross domestic product. New car sales haven’t been strong outside of the United States either. For example, Chinese new car sales decreased more than 12% from January to June 2019.
U.S. consumer purchases dropped 3.5% during the first half of 2019 to hit their lowest six-month total since the corresponding period in 2013, according to J.D. Power and Associates. AlixPartners predicted that sales will fall more than 2% this year, with even fewer sales in 2020 and 2021.